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HEALTH PROFESSIONALS EDUCATION AND TRAININGFOR HEALTH SYSTEM REFORMS PROJECTFinancing Agreement No. 5441-VNGrant Agreement No. TF0A1658

AUDITED FINANCIAL STATEMENTSFor the year ended 31 December 2017

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IHealth Professionals Education and Training for Health System Reforms ProjectFinancing Agreement No. 5441-VN and Grant No. TF0A1658

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CONTENTS Page

PART I INDEPENDENT AUDITORS' REPORT ONTHE FINANCIAL STATEMENTS

Report of the Project Management Unit 3

Independent Auditors' Report on the Financial statements 4-5

Audited Financial statements

Statement of Funds and Expenditures 6

Statement of Funds balance 7

Statement of Designated Accounts 8-9

Statement of Withdrawals and Reconciliation of Funds 10-11Notes to the Financial statements 12-20

PART II INDEPENDENT AUDITORS' REPORT ON 21-22THE INTERNAL CONTROL SYSTEM

PART III INDEPENDENT AUDITORS' REPORT ON 23-24I THE COMPLIANCE

PART IV MANAGEMENT LETTER 25-33

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Health Professionals Education and Training for Health System Reforms ProjectFinancing Agreement No. 5441-VN and Grant No. TF0A1658

REPORT OF THE PROJECT MANAGEMENT UNIT

The Health Professionals Education and Training for Health System Reforms Project ("the Project")presents this report and the Financial Statements of the Project for the year ended 31 December 2017.

The Project

The Project is funded by the International Development Association (IDA) under the FinancingAgreement No. 5441-VN dated 17 July 2014 and European Union (EU) under the FinancingAgreement No. DCI-ASIE/2013/024-370 dated 04 December 2014 which was replaced by the GrantNo. TFOA1658 dated 28 March 2017 between the Government of the Socialist Republic of Vietnamand the World Bank.

The Project Management Unit

Members of the Project Management Unit ("the PMU") in the period and to the reporting date are:

Mr. Nguyen Ngo Quang DirectorMr. Dang Viet Hung Deputy DirectorMr. Ha Anh Duc Deputy DirectorMr. Nguyen Hong Son Deputy DirectorMrs. Tran Thi Mai Oanh Deputy DirectorMrs. Nguyen Thi Bich Chief Accountant

Auditors

The auditors of AASC Limited have taken the audit of financial statements of the Project.

Responsibilities of the Project Management Unit

The Project Management Unit is responsible for preparing the project financial statements, includingStatement of Funds and Expenditures, Statement of Funds balance, Statement of Designated Accountand Statement of Withdrawals and Reconciliation of Funds, which comply with the accounting policiesdescribed in the attached Notes to the Financial Statements. The Project Management Unit assuresthat the accounting policies are appropriately selected and consistently applied.

The Project Management Unit assures that the accounting records were fully maintained to preparethe financial statements in accordance with the applied accounting policies and to disclose, withreasonable accuracy at any time, the financial position of the Project.

The Project Management Unit is also responsible for maintaining an effective internal control asmanagement determines necessary to enable the preparation of financial statements that are freefrom material misstatement, whether due to fraud or error, and comply with relevant laws, regulationsand other provisions of the funding agreement that could have a direct and material financial effect onthe7P-ject financial statements.

On behalf of the Project Management Unit

Nguyen Ngo QuangDifector

Hanoi, 25 June 2018

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aasc

I No.: 250618.010/BCTC.FIS2

INDEPENDENT AUDITORS' REPORT ON THE FINANCIAL STATEMENTS

To: The Project Management Unit ofThe Health Professionals Education and Training for Health System Reforms Project

Opinion

We have audited the accompany financial statements of the Health Professionals Education andTraining for Health System Reforms Project ("the Project") which comprise Statement of Fundsbalance as at 31 December 2017, Statement of Funds and Expenditures, Statement of DesignatedAccount, Statement of Withdrawals and Reconciliation of Funds for the year ended 31 December2017, and Notes to the Financial Statements, including a summary of significant accounting1 policies.

In our opinion:

- The accompany Financial Statements give a true and fair view, of the financial position of theProject, including the balance of the Designated Accounts as at 31 December 2017, fundsreceived and expenditures incurred, movements of the Designated Accounts for the year thenended in accordance with the basis of the principal accounting policies described in the Notesto the Financial Statements and the provisions of the Financing Agreement No. 5441-VN dated17 July 2014 and Grant No. TF0A1658 dated 28 March 2017;

- In addition, with respect to Statements of Expenditure, adequate supporting documents havebeen fully maintained to support to the replenishment requests submitted to the World Bank.The expenditures are eligible and in right purposes of the Financing Agreement No. 5441-VNdated 17 July 2014 and Grant No. TF0A1658 dated 28 March 2017.

Basis of Opinion

We conducted our audit in accordance with International Standards on Auditing ("ISAs"). Ourresponsibilities under those standards are further described in the Auditors' Responsibilities for theAudit of the Financial Statements section of our report. We are independent of Project ManagementUnit in accordance with the international Ethics Standards Board for Accountants' Code of Ethics forProfessional Accountants ("IESBA Code"), and we have fulfilled our other ethical responsibilities inaccordance with the IESBA Code. We believe that the audit evidence we have obtained is sufficientand appropriate to provide a basis for our opinion.

Responsibilities of Management for the Financial Statements

The Project Management Unit is responsible for the preparation of the financial statements inaccordance with the principal accounting policies described in Notes to the Financial Statements,and for such internal control as management determines is necessary to enable the preparation offinancial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is responsible for assessing the Project's abilityto continue as a going concern, disclosing, as applicable, matters relating to going concern andusing the going concern basis of accounting unless management either intends to ceaseoperations, or has no realistic alternative but to do so.

II T:84) 24 3824 1990 F: (84) 24 3825 3973 1 Le Phung Hieu, iano. Vietnam A member of International

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Auditor's Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as awhole are free from material misstatement, whether due to fraud or error, and to issue an auditor'sI report that includes our opinion. Reasonable assurance is a high level of assurance, but is not aguarantee that an audit conducted in accordance with ISAs will always detect a materialmisstatement when it exists. Misstatements can arise from fraud or error and are consideredmaterial if, individually or in the aggregate, they could reasonably be expected to influence theeconomic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with ISAs, we exercise professional judgment and maintainprofessional skepticism throughout the audit. We also:

- Identify and assess the risks of material misstatement of the financial statements, whether dueto fraud or error, design and perform audit procedures responsive to those risks, and obtainaudit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk ofnot detecting a material misstatement resulting from fraud is higher than for one resulting fromerror, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or theoverride of internal control.

- Obtain an understanding of internal control relevant to the audit in order to design auditprocedures that are appropriate in the circumstances, but not for the purpose of expressing anopinion on the effectiveness of the Project's internal control.

- Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by management.

- Conclude on the appropriateness of management's use of the going concern basis ofaccounting and, based on the audit evidence obtained, whether a material uncertainty existsrelated to events or conditions that may cast significant doubt on the Project's ability to continueas a going concern. If we conclude that a material uncertainty exists, we are required to drawattention in our auditors' report to the related disclosures financial statements or, if suchdisclosures are inadequate, to modify our opinion. Our conclusions are based on the auditevidence obtained up to the date of our auditors' report. However, future events or conditionsmay cause the Project to cease to continue as a going concern.

- Evaluate the overall presentation, structure and content of the financial statements, includingthe disclosures, and whether the financial statements represent the underlying transactions andevents in a manner that achieves fair presentation.

We communicate with the Project Management Unit regarding, among other matters, the plannedscope and timing of the audit and significant audit findings, including any significant deficiencies ininternal control that we identify during our audit.

AASC Limited

IDo Manh Cuong Nguyen Pham HungDeputy General Director Auditor in-chargeCPA Registered No.: CPA Registered No.:0744-2018-002-1 2893-2015-002-1

Hanoi, 25 June 2018

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Health Professionals Education and Training for Health System Reforms Project Financial StatementsFinancing Agreement No. 5441-VN and Grant No. TF0A1658 Year ended 31 December 2017

STATEMENT OF FUNDS AND EXPENDITURESFor the year ended 31 December 2017

Accumulated Year ended AccumulatedNote to 31/12/2016 31/12/2017 to 31/1212017

VND VND VNDI. FundsI Funds received from the World Bank 3 83,682,458,638 33,663,000,000 117,345,458,6382 Counterpart funds 4 4,093,844,051 3,104,727,887 7,198,571,9383 Other funds - Foreign exchange rate differences 530,887,462 1,393,836,848 1,924,724,310

88,307,190,151 38,161,564,735 126,468,754,886

II. Expenditures1 Goods 3,237,285,500 8,493,315,357 11,730,600,8572 Training and Workshops 8,138,652,473 9,429,881,222 17,568,533,6953 Consultants' Services 2,470,939,015 7,798,432,353 10,269,371,3684 Incremental Operating Costs 7,760,905,689 12,741,501,016 20,502,406,705

5 21,607,782,677 38,463,129,948 60,070,912,625

Ill. Surplus / (Deficit) 66,699,407,474 (301,565,213) 66,397,842,261

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1Health Professionals Education and Training for HealthSystem Reforms Project Financial StatementsFinancing Agreement No. 5441-VN and Grant No. TF0A1658 Year ended 31 December 2017

STATEMENT OF FUNDS BALANCEAs at 31 December 2017

Note 31/12/2017 31/12/2016VND VND

I Surplus I (Deficit)

Surplus as at beginning 66,699,407,474Surplus / (Deficit) in the year (301,565,213) 66,699,407,474Surplus as at closing 66,397,842,261 66,699,407,474

Represented by:

Current assets 73,389,845,801 67,077,367,558

Cash on hand 87,738,418 92,944,013Cash at bank 6 62,936,898,737 61,183,003,278Cash in transit - 144,391,290Advances to staff 66,601,000 195,867,977Advances to contractors 7 10,298,607,646 5,461,161,000

Current liabilities 6,992,003,540 377,960,084

Payables to contractors 8 5,279,563,614 -Payables to employees 252,254,512 314,002,823Tax payables and statutory obligations 16,682,244 6,009,818Other payables 9 1,443,503,170 57,947,443

Net worth 66,397,842,261 66,699,407,474

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I STATEMENT OF DESIGNATED ACCOUNT

For the period: from 01/01/2017 to 31/12/2017Account No. 01101370002375Bank: Vietnam Maritime Commercial Joint Stock BankAddress: Sky City Tower Building, 88 Lang Ha, Dong Da, HanoiAgreement No. IDA 5441-VN

PART A: ACTIVITIES Note USD

Opening balance 2,615,014.43 .

Deduct: Amounts withdrawn (1,299,066.39)

I Closing balance 1,315,948.04

PART B: RECONCILIATION

1. Amount advanced by the World Bank 3,400,000.002. Deduct: Amount recovered by the World Bank (386,845.66)3. Present outstanding amount advanced to 3,013,154.34

4. Closing balance 1,315,948.045. Add: Amounts withdrawn and not yet claimed (1) 1,697,206.30

6. Total advances accounted for 3,013,154.34

(1) Including USD

Amounts withdrawn and claimed on Withdrawal Applications No.0007 485,362.58dated 14/03/2018Amounts withdrawn and not yet claimed 680,337.46-At CPMU 496,026.08-At SPMUs 184,311.38Cash on hand 3,314.49- At CPMU 3,220.47-At SPMUs 94.02Advances to staff 2,393.20-At CPMU 1,440.58- At Ho Chi Minh University of Medicine and Pharmacy 952.62Advances to contractors 350,898.59I Advances to SPMUs 174,899.98

1,697,206.30

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IHealth Professionals Education and Training for HealthSystem Reforms Project Financial StatementsFinancing Agreement No. 5441-VN and Grant No. TF0A1658 Year ended 31 December 2017

STATEMENT OF DESIGNATED ACCOUNT

For the period: from 01/01/2017 to 31/12/2017Account No. 01101370002432Bank: Vietnam Maritime Commercial Joint Stock BankAddress: Sky City Tower Building, 88 Lang Ha, Dong Da, HanoiGrant No. TFOA1658

PART A: ACTIVITIES Note USD

Opening balance

Add: Amounts deposited by the World Bank 1,500,000.00Deduct: Amounts withdrawn (188,389.92)

Closing balance 1,311,610.08

PART B: RECONCILIATION

1. Amount advanced by the World Bank 1,500,000.002. Deduct: Amount recovered by the World Bank -3. Present outstanding amount advanced to 1,500,000.00

4. Closing balance 1,311,610.085. Add: Amounts withdrawn and not yet claimed (1) 188,389.92

6. Total advances accounted for 1,500,000.00

(1) Including USD

Training and Workshops 137,837.59Incremental Operating Costs 50,552.33

188,389.92

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STATEMENT OF WITHDRAWALS AND RECONCILIATION OF FUNDSFinancing Agreement No. 5441-VNFor the year ended 31 December 2017

Withdrawal applications Amount Amount receivedNo. Date Currency claimed Date Amount Variances Note

(a) (b) (b)-(a)

Designated account 386,845.66 - (386,845.66)

Replenishment0006 10/10/2017 USD 349,919.29 - (349,919.29)0008 20/12/2017 USD 36,926.37 - (36,926.37)

Total amounts 386,845.66 - (386,845.66) (*)

(*) Recovered by the World Bank

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STATEMENT OF WITHDRAWALS AND RECONCILIATION OF FUNDSGrant No. TF0A1658For the year ended 31 December 2017

Withdrawal applications Amount received

No. Date Currency Amount claimed Date Amount VariancesI(b) (b-a)Designated account 1,500,000.00 1,500,000.00

AdvanceTF01 21/09/2017 USD 1,500,000.00 27/09/2017 1,500,000.00I Total amounts 1,500,000.00 1,500,000.00 -

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IHealth Professionals Education and Training for HealthSystem Reforms Project Financial StatementsFinancing Agreement No. 5441-VN and Grant No. TFOA1658 Year ended 31 December 2017

NOTES TO THE FINANCIAL STATEMENTSFor the year ended 31 December 2017

1. Background

The Health Professionals Education and Training for Health System Reforms Project (HPET) isfunded by the International Development Association (IDA) under the Financing Agreement No.5441-VN dated 17 July 2014 and European Union (EU) under the Financing Agreement No. DCI-ASIE/2013/024-370 dated 04 December 2014 which was replaced by the Grant No. TF0A1658dated 28 March 2017 between the Government of the Socialist Republic of Vietnam and theWorld Bank. Total IDA loan and Grant fund are initially SDR 68,600,000 (equivalent to USD 106million) and EUR 7,428,500 (equivalent to USD 7,753,000). The adjusted IDA loan is USD 86million (according to the Ministry of Health's Official Letter No. 1130/BYT-KH-TC dated10/03/2017 on the adjustment of the total investment decision of HPET project using WB loans).

The main objective of the Financing Agreement No. 5441-VN is to improve the quality of healthprofessionals education, strengthen management competencies of the Recipient in the healthsector, and improve the competencies of primary health care teams at the grass-roots level.

The objective of the Grant No TF0A1658 is to support the implementation of Part 3(a) of theProject including the improvement of the competencies of the primary health care teams at thegrass-roots level.

I The Project consists of the following components:

3 Part 1: Improving the Quality of Health Professionals Education.

(a) Improving the Quality Assurance System of Health Professionals Education;(b) Supporting Measures to Meet the Standards of Health Professionals Education.

I Part 2: Strengthening Management Competencies in the Health Sector.

(a) Strengthening Health Management Training;(b) Improving Policy Making in Human Resources for Health.

Part 3: Improving Competencies of Primary Health Care Teams at the Grass-roots Level.

(a) Training Primary Health Care Teams at the Grass-roots Level;(b) Improving Trained Primary Health Care Teams Access to Basic Equipment According to theI National Benchmarks.

Part 4: Project Management.

The Financing Agreement No. 5441-VN officially came into operation since 30 October 2014 andis expected to close on 31 December 2020. The Grant No. TF0A1658 dated 28 March 2017 is

expected to close on 30 November 2018.

The Project is managed by Project Management Unit of Health Professionals Education andTraining for Health System Reforms Project (CPMU) and its office is located at Rooms No. 101-104, Van Phuc building, No. 02 Nui Truc, Ba Binh, Hanoi. The Project is also managed by theSchool of Project Management Unit ("SPMU"), including:

SPMU Address Location

Thai Binh University of Medicine 373 Ly Bon Street, Thai Binh City Thai Binhand PharmacyHo Chi Minh University of 217 Hong Bang Street, Ward 11, Ho Chi MinhMedicine and Pharmacy District 5Thai Binh Medical College 290 Phan Ba Vanh Street, Quang Thai Binh

Trung Ward, Thai Binh City

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SPMU Address Location

Lam Dong Medical College 16 Ngo Quyen Street, Ward 6, Da Lam DongLat City

Danang University of Medicine 99 Hung Vuong Street, Hai Chau I Da Nangand Pharmacy Ward, Hai Chau DistrictHai Phong University of Medicine 72A Nguyen Binh Khiem, Dang Gia HaiPhongand Pharmacy Ward, Ngo Quyen DistrictHanoi Medical University 1 Ton That Tung Street, Kim Lien Ha Noi

Ward, Dong Da DistrictQuang Nam Medical College 3 Nguyen Du Street, An My Ward, Quang Nam

Tam Ky DistrictPhu Yen Medical College 270 Tran Hung Dao Street, Ward 6, Phu Yen

Tuy Hoa CityQuang Ninh Medical College 5 Hai Son Street, Hong Hai Ward, Quang NinhI Ha Long CityHai Duong Medical Technical 1 Vu Huu Street, Thanh Trung Ward, Hai DuongUniversity Hai Duong CityThai Nguyen University of 284 Luong Ngoc Quyen, Quan Trung Thai Nguyen .0Medicine and Pharmacy Ward, Thai Nguyen CityHue University of Medicine and 6 Ngo Quyen Street, Vinh Ninh Thua Thien HuePharmacy Ward, Hue CityBach Mai Hospital 78 Giai Phong, Phuong Mai Ward, Ha Noi

Dong Da District

2. Principal Accounting Policies

a. Basis of accounting

Annual accounting period commences from 1st January and ends at 3 1st December.

The financial statements are prepared in accordance with the requirements of the World Bankand presented in Vietnam Dong (VND), except the Statement of Designated Account andStatement of Withdrawals and Reconciliation of Funds which are prepared in United State Dollar(USD).

The principal accounting policies are summarized as below:

b. Foreign currencies

Funds received from the World Bank in foreign currency is translated into VND using theexchange rates announced by the Ministry of Finance at dates funds are received or directpayments are made to contractors/suppliers.

I Other transactions in foreign currencies are translated into VND using actual exchange rates attransaction dates as announced by the Vietnam Maritime Commercial Joint Stock Bank.

Monetary assets and liabilities denominated in foreign currencies are revalued at the actualexchange rate announced by the Ministry of Finance at the reporting date. All differences onforeign exchange are recorded into exchange rate differences account and presented as otherfunds on Statement of Funds and Expenditures.

c. Funds and Expenditures

Funds:

- Funds received from the World Bank are recognized when remittance made into theDesignated Accounts or direct payment made to contractors/suppliers;

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Counterpart funds are recognized when payments are made directly from the State Treasuryto contractors/suppliers of the project or funds are withdrawn to the CPMU and SPMU forsettlement of project's activities including any payments under current year plant until the next31/1.

Expenditures are recorded when they are actually occurred.

d. Designated account and its interest

Designated Accounts are the deposit account in USD opened at the Maritime Commercial JointStock Bank for the Project's activities. Payments made via the Designated Account are for eligibleexpenditures of the Project in accordance with the provisions of the Financing Agreement No.5441-VN dated 17 July 2014 and the Grant No. TF0A1658 dated 28 March 2017.

Interests of the Designated Accounts are separately recorded and and presented as Other

I Payables on the Statement of Funds balance, and used to cover bank charges. At the end of theProject, outstanding interests will be returned to the State Budget. In case bank charges are notfully covered by the interests, the Project Management Unit will plan to settle them by the fundfrom the World Bank, as regulated in Financing Agreement No. 5441-VN dated 17 July 2014.

3. Funds received from the World Bank

Year ended 31/12/2017 Accumulated to 31/12/2017Original Equivalent Original Equivalent

currency to VND currency to VND

Financing Agreement - 3,805,731.61 83,682,458,638No. 5441 - VNDesignated account (USD) - - 3,805,731.61 83,682,458,638Advance - 3,400,000.00 74,745,700,000Replenishment - 405,731.61 8,936,758,638

Grant Agreement 1,500,000.00 33,663,000,000 1,500,000.00 33,663,000,000No. TFOA1658Designated account (USD) 1,500,000.00 33,663,000,000 1,500,000.00 33,663,000,000Advance 1,500,000.00 33,663,000,000 1,500,000.00 33,663,000,000

1,500,000.00 33,663,000,000 5,305,731.61 117,345,458,638

4. Counterpart funds

Year ended Accumulated31/12/2017 to 31/12/2017

VND VND

CPMU 2,670,573,047 6,764,417,098

SPMU 434,154,840 434,154,840Ho Chi Minh University of Medicine and Pharmacy 434,154,840 434,154,840

3,104,727,887 7,198,571,938

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IHealth Professionals Education and Training for HealthSystem Reforms Project Financial StatementsFinancing Agreement No. 5441-VN and Grant No. TF0A1 658 Year ended 31 December 2017

5. Expenditures

Year ended Accumulated31/12/2017 to 31/12/2017I VND VND

Expenditures covered by:Financing Agreement No 5441-VN 33,960,738,454 51,474,677,080Grant No. TF0A1658 1,365,893,796 1,365,893,796The Counterpart funds 3,136,497,698 7,230,341,749

38,463,129,948 60,070,912,625

The Financing Agreement No. 5441-VN dated 17/07/2014 finances 100% (inclusive of taxes) ofeligible expenditures includings goods (including transportation), works, services, incrementaloperating costs (excluding salaries, salary allowances, and salary supplements of the Project'scivil servants), training and workshops, and output based payments according to the MOU'sentered into under part 2 and 3(a) of the Project.

I The Grant No. TF0A1658 dated 28/03/2017 finances 100% (inclusive of taxes) of eligibleexpenditures includings goods, works, services, incremental operating costs, training andworkshops, and output based payments according to the MOU's entered into under part 3(a) of o

Ithe Project.

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Health Professionals Education and Training for Health System Reforms Project Financial StatementsFinancing Agreement No. 5441-VN and Grant No. TF0A1658 Year ended 31 December 2017

Expenditures by the components

Year ended 31/12/2017 Accumulated to 31/12/2017IDA 5441 - VN TF0A1658 Counterpart Fund Total IDA 5441 - VN TF0A1658 Counterpart Fund Total

VND VND VND VND VND VND VND VND

Part 1: Improving the Quality of 10,337,643,140 - 434,154,840 10,771,797,980 14,020,265,152 - 434,154,840 14,454,419,992Health Professionals Education(a) Improving the Quality 3,773,906,500 - 3,773,906,500 6,746,178,287 - - 6,746,178,287Assurance System of HealthProfessionals Education(b) Supporting Measures to Meet 6,563,736,640 - 434,154,840 6,997,891,480 7,274,086,865 - 434,154,840 7,708,241,705the Standards of HealthProfessionals Education

Part 2: Strengthening 14,406,976,844 - 14,406,976,844 17,705,306,446 - - 17,705,306,446Management Competencies inthe Health Sector(a) Strengthening Health 10,246,646,099 - - 10,246,646,099 11,069,619,701 - - 11,069,619,701Management Training(b) Improving Policy Making in 4,160,330,745 - - 4,160,330,745 6,635,686,745 - - 6,635,686,745Human Resources for Health

Part 3: Improving Competencies 3,801,843,651 1,365,893,796 - 5,167,737,447 5,286,408,680 1,365,893,796 - 6,652,302,476of Primary Health Care Teams atthe Grass-roots Level(a) Training Primary Health Care 3,095,124,181 1,365,893,796 - 4,461,017,977 4,576,546,410 1,365,893,796 - 5,942,440,206Teams at the Grass-roots Level(b) Improving Trained Primary 706,719,470 - - 706,719,470 709,862,270 - - 709,862,270Health Care Teams Access toBasic Equipment According tothe National Benchmarks

Part 4: Project Management 5,414,274,819 - 2,702,342,858 8,116,617,677 14,462,696,802 - 6,796,186,909 21,258,883,711

33,960,738,454 1,365,893,796 3,136,497,698 38,463,129,948 51,474,677,080 1,365,893,796 7,230,341,749 60,070,912,625

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- - - m -m--mMM -MMM -Health Professionals Education and Training for Health System Reforms Project Financial StatementsFinancing Agreement No. 5441-VN and Grant No. TF0A1658 Year ended 31 December 2017

Expenditures by the cateqories

Year ended 31/12/2017 Accumulated to 31/12/2017IDA 5441 - VN TF0A1658 Counterpart fund Total IDA 5441 - VN TF0A1658 Counterpart fund Total

VND VND VND VND VND VND VND VND

Goods 8,493,315,357 - - 8,493,315,357 11,730,600,857 - - 11,730,600,857Training and Workshops 8,962,014,222 467,867,000 - 9,429,881,222 17,100,666,695 467,867,000 - 17,568,533,695Consultants' Services 7,798,432,353 - - 7,798,432,353 10,269,371,368 - - 10,269,371,368Incremental Operating Costs 8,706,976,522 898,026,796 3,136,497,698 12,741,501,016 12,374,038,160 898,026,796 7,230,341,749 20,502,406,705

33,960,738,454 1,365,893,796 3,136,497,698 38,463,129,948 51,474,677,080 1,365,893,796 7,230,341,749 60,070,912,625

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1Health Professionals Education and Training for HealthSystem Reforms Project Financial StatementsFinancing Agreement No. 5441-VN and Grant No. TFOA1658 Year ended 31 December 2017

6. Cash at bank

I 31/12/2017 31/12/2016VND VND

I At CPMU 59,007,562,547 57,640,593,500Designated account IDA 5441 -VN (USD) 29,544,349,446 57,604,292,484Interest account of Designated account IDA 5441-VN (USD) 8,539 8,539Designated account TFOA1 658 (USD) 29,446,957,906 -Current account (VND) 10,436,856 36,053,194Interest account of Current account (VND) 5,809,800 239,283

At SPMUs 3,929,336,190 3,542,409,778Thai Binh University of Medicine and Pharmacy 397,783Ho Chi Minh University of Medicine and Pharmacy 368,096,445 3,542,409,778Thai Binh Medical College 1,294,974 -Lam Dong Medical College 105,923,818 -Danang University of Medicine and Pharmacy 195,956,802 -Hai Phong University of Medicine and Pharmacy 249,206,100 -Hanoi Medical University 319,795,861 -Quang Nam Medical College 222,264,900 -Phu Yen Medical College 220,872,938 -Quang Ninh Medical College 257,625,225 -Hai Duong Medical Technical University 130,844,428 -Thai Nguyen University of Medicine and Pharmacy 267,391,410 -Hue University of Medicine and Pharmacy 1,367,400,606 -Bach Mai Hospital 222,264,900 -

62,936,898,737 61,183,003,278

7. Advances to contractors

31/12/2017 31/12/2016VND VND

At CPMUHanoi Medical University 6,481,600,000 2,547,400,000Hue University of Medicine and Pharmacy 1,409,400,000 -Pham Ngoc Thach University of Medicine 957,753,600 -Thai Nguyen University of Medicine and Pharmacy 371,460,000 -Hai Phong University of Medicine and Pharmacy 638,255,000 -Health Department of Lao Cai province 165,348,000 -Institute of Public Health in Ho Chi Minh city 90,808,356 242,000,000Khanh Hoa Department of Health 82,575,000 -Health Department of Lam Dong province 49,962,690 170,000,000Health Department of Ha Giang province 24,653,000 -Health Department of Gia Lai province 24,004,500Health Department of Nam Dinh province 2,787,500Hanoi University of Public Health - 2,496,550,000Health Department of Yen Bai province - 5,211,000

10,298,607,646 5,461,161,000

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8. Payable to contractors

31/12/2017 31/12/2016I VND VND

At CPMU 3,195,472,614Ecole des hautes estudes an sante publique 224,390,000 -Hanoi University of Public Health 1,164,993,775 -University of Melbourne Revenue Account 240,786,975 -Vu Viet Nu 321,249,500 -Others 1,244,052,364 -

At SPMUs 2,084,091,000Ho Chi Minh University of Medicine and Pharmacy 1,686,103,400 -Hanoi Medical University 39,775,000 -Thai Binh University of Medicine and Pharmacy 255,520,600 -Thai Binh Medical College 11,885,000 -Hai Phong University of Medicine and Pharmacy 90,807,000

I 5,279,563,614 -

9. Other payables

31/12/2017 31/12/2016VND VND

At CPMU 1,252,530,429 57,947,443DaLat Tourism Service JSC 72,250,000 -Doan An Dieu Duong 295 353,400,000 -Nghi Tam Trading and Travel Services JSC 167,607,000 -Thien Ha International Tourism and 35,150,000Investment Consultant Co.,Ltd -Insurances 12,426,420 51,532,650Others 611,697,009 6,414,793

At SPMUs 190,972,741Ho Chi Minh University of Medicine and Pharmacy 190,908,139Danang University of Medicine and Pharmacy 64,602 -

I 1,443,503,170 57,947,443

10. Subsequent events

There have been no significant events occurring after the reporting date, which would requireadjustments or disclosures to be made in the financial statements.

3 11. Corresponding figures

The corresponding figures are the financial statements for the period from 30 October 2014 to 31December 2016 which were audited by AASC Limited.

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12. Approval of the Financial Statements

II The financial statements were approved by Project Management Unit for issuance on 25 June 2018.

Nguyen Ngo Quang Nguyen Thi BichDirector Chief Accountant

Hanoi, 25 June 2018

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aasc

No.: 250618.010/BCTC.FIS2

INDEPENDENT AUDITORS' REPORT ON THE INTERNAL CONTROL SYSTEM

To: The Project Management Unit ofThe Health Professionals Education and Training for Health System Reforms Project

We have audited, in accordance with International Standards on Auditing, the financial statementsof the Health Professionals Education and Training for Health System Reforms Project ("theProject") for the year ended 31 December 2017 and issued the auditors' report thereon dated 25June 2018 expressing an opinion on those financial statements.

I In connection with our audit of the financial statements, we also examined the effectiveness ofinternal control over compliance with requirements that could have a direct and material financialeffect on the financial statements as well as the internal control over financial reporting for the year

ended 31 December 2017.


The Project Management Unit is responsible for maintaining an effective internal control overcompliance with requirements that could have a direct and material financial effect on the financialI statements as well as the internal control over financial reporting.

Auditor's Responsibility

Our responsibility is to express an opinion on the effectiveness of internal control based on ourexamination.

Our examination was conducted in accordance with the International Standard on AssuranceEngagements (ISAE) 3000 (Revised). That standard requires that we comply with ethicalrequirements and plan and perform our procedures to obtain reasonable assurance about whether,in all material respects, the Project has maintained an effective internal control over compliance withrequirements that could have a direct and material financial effect on the financial statements aswell as internal control over financial reporting.

Our examination included obtaining an understanding, testing, and evaluating the design andoperating effectiveness of the internal control, and performing other procedures as we considerednecessary in the circumstances to obtain sufficient appropriate evidence to provide a basis for ouropinion.

Because of the inherent limitations of internal control over financial reporting, including thepossibility of collusion or improper management override of controls, material misstatements due toerror or fraud may occur and not to be prevented or detected on a regular basis. In addition,projections of any evaluation of the effectiveness of the internal control over financial reporting tofuture periods are subject to the risk that controls may become inadequate because of changes inconditions, or that the degree of compliance with the policies or procedures may deteriorate.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basisfor our opinion.

II

T:(84) 24 3824 1990 I ( 84) 24 3825 3973 1 1 Le Phung Hieu, HanoL Vietnam A member of International

HANG KM TOANk C 21

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Auditors' opinion

in our opinion, the Project has maintained an effective internal control over misstatements that couldhave a direct and material financial effect on the Project financial statements for the year ended 31I December 2017.

AASC Limited

Idoi Mi-n-hdCuong Nguyen Pham HungDeputy General Director Auditor in-chargeCPA Registered No.: CPA Registered No.:0744-2018-002-1 2893-2015-002-1

I Hanoi, 25 June 2018

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aascNo.: 250618.010/BCTC.FIS2

INDEPENDENT AUDITORS' REPORT ON THE COMPLIANCE

To: Project Management Unit ofHealth Professionals Education and Training for Health System Reforms Project

We have audited, in accordance with the International Standards on Auditing, the financialstatements of the Health Professionals Education and Training for Health System Reforms Project("the Project") for the year ended 31 December 2017 and issued the auditors' report thereon datedon 25 June 2018 expressing an opinion on those financial statements.

In connection with the audit of the financial statements, we also performed procedures on theProject's compliance with the Financing Agreement No. 5441-VN dated 17 July 2014 and GrantNo. TFOA1658 dated 28 March 2017, law and regulations that have a direct and material effect onthe Project's financial statements for the year ended 31 December 2017 ("the Requirements").


The Project Management Unit is responsible for complying with the Requirements applicable to theProject.

1 Auditor's Responsibility

Our responsibility is to express an opinion on the Project's compliance with the Requirementsbased on our procedures. We limited our tests of compliance to the Requirements, and we did nottest compliance with all laws and regulations applicable to the Project.

We performed our work in accordance with the International Standard on Assurance Engagements(ISAE) 3000 (Revised). That standard requires that we comply with ethical requirements and planand perform our procedures to obtain reasonable assurance about whether, in all material respects,the Project has complied with the Requirements.

An assurance engagement to report on the compliance with the Requirements at the Projectinvolves performing procedures to obtain evidence about whether the Project's activities are free ofmaterial non-compliance with the Requirements, including obtaining an understanding of theinternal control relevant to the Project's compliance with the Requirements. The proceduresselected depend on the auditors' judgment, including the assessment of risks that the Project doesnot comply with the Requirements and whether such non-compliance could have a direct andmaterial financial effect on the Project's financial statements. Our procedures included testing thecompliance with the Requirements we consider necessary to provide a reasonable assurance thatthe Requirements are complied by the Project.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis

I for our opinion.

T (84 24 3824 1990 : 84) 24 3825 3973 1 1 Le Phung HiNeu, HanoL Vietnam A member of International

HAN I KM TOAN AC 23

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Auditors' opinion

In our opinion, the Project has complied, with the Requirements that could have a direct and materialfinancial effect on the Project's financial statements for the year ended 31 December 2017.

AASC Limited

Do Manh Cuong Nguyen Pham HungDeputy General Director Auditor in-chargeCPA Registered No.: CPA Registered No.:0744-2017-002-1 2893-2015-002-1

Hanoi, 25 June 2018

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health professionals education and training for …...- evaluate the overall presentation, structure...

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